“Mr. Meru then entered into a government-sponsored repayment plan based on income. He agreed to monthly payments at 10% of his discretionary income, defined as adjusted gross income minus 150% of the poverty level. Any balance remaining after 25 years is forgiven, effectively covered by taxpayers. The forgiven amount is then taxed as ordinary income.
Without the government help, Mr. Meru’s monthly payment would be $10,541.91, according to an email from his loan servicer. His current monthly income, after taxes, is roughly $13,333.”
Also:
“The government repayment plan affords the Meru family a comfortable life. Their home is on a mountain with panoramic views of the snow-capped peaks surrounding Salt Lake City. They take vacations, including a recent trip to Havana. He drives a used Tesla.”
Good for him that he’s allowed a ‘comfortable lifestyle” while people like me have busted their asses all their lives to get ahead and aren’t subsidized by welfare into ‘comfortable lifestyle’ that allows for Teslas and vacations in Cuba.
“The couple bought a home in Draper in 2012, using a $400,000 mortgage that Mrs. Meru took out in her name. She used an inheritance from her grandmother for the down payment. Her mother cosigned the loan.“
Holy *expletive deleted*ck.
“Since refinancing his debt with the federal government in 2015, lowering the rate to 7.25%, Mr. Meru’s balance has grown by $148,948. It will keep growing through the 25-year life of the repayment plan until it reaches $2 million. That sum will be forgiven and, at current tax rates, could cost Mr. Meru more than $700,000 in income tax payments.“
Sounds good, right?
Well if he puts away around $2000/month of that at a modest interest rate, he’ll easily be able to pay that off in 25 years, with money to spare.
I have zero sympathy for this *expletive deleted*bag.